However, Mr Cohn has warned that the trade battle war between the two giants will simply hurt the back pocket of many American consumers - which will in turn hurt the US economy.

"We are not a manufacturing economy," he said. "So if US citizens can buy products cheaply, they have more money to spend on goods, and once they spend on goods they can take the additional money they have and they can save it - and we do need a higher savings rate in the US.

"I look at tariffs as a bit of a consumption tax [and] we do not want to tax our consumers when they're going to spend their disposable income on what we produce, which is services."

Mr Cohn said Mr Trump had a clear idea of what he wanted to achieve in any further trade negotiations with China.

"The president has his style, he has his tactics," the former advisor said.

"People have questioned him all the way ... [but he] is moving forward on trade, moving forward on protecting US companies, moving forward on protecting US jobs - he understands that's what he ultimately has to do."